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Europe
- EU Member States
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About ITEN-Poland
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Background and
Significance
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Research Priorities
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Activities
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Research Products
- Non-EU Countries,
EU Candidates and Former Soviet Republics
Africa
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Latin America
- Mexico
- Other Latin
American Countries
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Assessment
of issues related to smuggling and tobacco taxation.
Although tobacco
control efforts in Poland actively support tax hikes as an effective means
to decreasing consumption, the tobacco industry warns the government against
them. Fearful that higher tobacco taxes will reduce consumer sales of
their product, the tobacco industry opposes tobacco taxation and contends
that higher tobacco taxes lead to smuggling. Losses in sales due to smuggling
are a concern for both producers and government. For policymakers in particular,
lost legal tobacco sales translate into lost tax revenues. Although
the Health Promotion Foundation is confident that their work can help
diminish cigarette smuggling in Poland, complete success in the region
will require international cooperation. The information produced by Foundation
work will be disseminated through reports, regional seminars and international
workshops. In this manner, policymakers in Poland, in the CEE region
and around the world can learn, exchange and develop new approaches to
dealing with the rapidly changing and multi-dimensional challenges of
smuggling. Below are highlights of research priorities pertaining to Poland’s
and CEE’s battle against smuggled cigarettes.
1. Mapping the mechanisms, incentives and characteristics behind tobacco
smuggling.
As in all regions and countries around the world, tobacco smuggling in
Poland and CEE countries constitutes a critical public health concern.
That is, because smuggling brings low priced cigarettes into domestic
markets and makes cigarettes both affordable and accessible, smuggling
increases cigarette consumption and raises tobacco’s burden on national
health. Cigarette smuggling also raises a number of negative economic
concerns. Here, tobacco smuggling works to undermine the national system
for tobacco taxation. It reduces both the legal sales of cigarettes and
total tobacco tax revenues to be collected by the national and/or local
government. In the end, the sale of smuggled cigarettes steals away
revenues that could be allocated to the national budget including health
services and progress in public health.
2. Identification of tobacco smugglers and products.
Recent evidence suggests that large tobacco companies themselves are
active participants in cigarette smuggling, including internal cigarette
company documents that have recently become available through anti-tobacco
lawsuits disclose details concerning cigarette company activity to both
encourage and support global cigarette smuggling. (Tobacco Free Kids,
1999 and 2000; Joossens and Raw, 2000) This documentation makes
open references to the movement of smuggled cigarette products through
terminology such as DNP’s (duty-not-paid cigarettes, illegally imported
into a country) or GT cigarettes (general trade cigarettes delivered to
a country through smuggling rather than legal routes. (Campaign for Tobacco
Free Kids, 2000)
3. Measuring the extent of cigarette smuggl ing.
Cigarette smuggling is an illegal market activity and although various
governments produce estimates of cigarette smuggling, these statistics
are never published, while others are often avoided because they are suspected
of being unreliable. Many studies have measured smuggling as the difference
between global exports and imports, and have considered the missing cigarettes
as “smuggled”. (Joossens, 1998) In addition to monitoring country by country
or global tobacco trade, other approaches to measuring tobacco smuggling
also exist. Estimates of smuggling can be captured through surveys
of consumers (DTZ Pieda Consulting, 2000), by comparing survey reported
tobacco consumption to tobacco sales figures or by comparing cigarette
consumption to cigarette sales through modeling. (Merrimen, forthcoming)
4. Dissemination and policy change.
Understanding the conditions which give rise to tobacco smuggling as well
as the effects of smuggling on tobacco prices, consumption, sales and
tax revenues are important elements to the healthy development of tobacco
control policies in Poland and Central and Eastern Europe. The Health
Promotion Foundation is actively involved in tobacco and tobacco control.
Its diverse team of scientific researchers, medical professionals and
tobacco-free advocates have the capacity to continue to provide policymakers
with the scientific evidence needed to ensure continued tobacco control
policy reform.
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